In the first six months of this year, the Czech Republic has issued medium and long-term bonds with a nominal value of 181.3 billion crowns, according to the Ministry of Finance’s updated Strategy for Financing and Managing State Debt.
The annual bond issuance is projected to reach between 350 and 450 billion crowns by year-end. This represents a significant increase compared to the same period last year, when the state issued bonds worth 146.3 billion crowns. Officials attribute this growth to a higher volume of previously issued bonds reaching maturity this year.
The Czech government uses bonds and treasury bills to finance its budget deficit and repay past obligations. This year’s budget deficit is expected to reach 241 billion crowns. In February, the state already repaid bonds from 2020 amounting to 109.5 billion crowns, and September will see the maturity of bonds from 2014 worth 104.7 billion crowns.
The Ministry of Finance estimates the total financing need for this year at 567.5 billion crowns, equivalent to 6.8 percent of GDP. This figure is slightly higher than last year’s 531 billion crowns (6.6 percent of GDP). While the budget deficit is expected to decrease by approximately 30 billion crowns year-on-year, the volume of maturing bonds has increased.
According to January forecasts confirmed in the updated strategy, the total state debt will rise to 3.614 trillion crowns by the end of this year, up from 3.365 trillion last year. Relative to economic performance, debt will increase to 43.1 percent of GDP from last year’s 41.8 percent. As of the end of the first quarter this year, the state debt stood at 3.41 trillion crowns, theoretically equating to 312,590 crowns per Czech citizen.